| OAT |
Obligation
Assimilable du Trisor. Long term French government debt. |
| OECD |
Organisation
for Economic Co-operation and Development. |
| OEICs |
See
Open-Ended Investment
Companies. |
| OFEX |
A facility
which permits London
Stock Exchange member firms to enter into
matched
bargains for securities which cannot be traded on the
Stock Exchange itself. It is not a regulated market, although Stock Exchange
member firms must comply with any relevant rules set up by the Stock Exchange
or the Securities and
Futures Authority (SFA). |
| OFT |
Office of Fair
Trading. |
| OMLX |
The London
Securities and Derivatives Exchange, the Swedish market operating in London
where Swedish equity and index
derivatives are
traded. |
| OMX |
The Swedish
equity index. |
| OPEC |
Organisation
for Petroleum Exporting Countries, an organisation to which many of the major
oil producing countries belong. |
| OTC |
See
Over-the-Counter. |
| Offer For
Sale |
An issue of
shares by a company where investors are invited to buy the shares from an
issuing house which has subscribed for the shares from the company. The issuing
house may also buy shares from existing shareholders in the company and sell
these on to investors as part of the new share issue. In rare circumstances,
the company may issue no new shares and the issuing house only sells on shares
held by existing shareholders. A method of issuing shares when a company is
obtaining a listing for the first time. See also
Offer for
Subscription, Intermediaries Offer,
Placing and
Introduction. |
Offer
Price
back to top |
The price at
which a market
maker is offering to sell shares. It is usually higher than the
‘bid
price’ at which they will buy shares. For example a quote of 510 -
515 indicates a bid price of 510 and an offer price of 515. In the USA, this is
known as the asking
price. |
| Offer for
Subscription |
An issue of
shares by a company where investors are invited to subscribe for the shares
directly with the company. A method of issuing shares when obtaining a listing
for the first time on the Stock Exchange. See also
Offer for Sale,
Intermediaries
Offer, Placing and
Introduction. |
| Office of
Fair Trading |
The Office of
Fair Trading is responsible for investigating mergers and takeovers to
recommend to the President of the Board of Trade as to whether the merger
should be investigated by the
Monopolies and Mergers
Commission. |
| Official
Listing |
Companies which
are granted an official listing for their securities by
the Stock Exchange are permitted to issue shares to the public and have the
shares traded in the secondary market under Stock Exchange
rules. The official listing enables the company to raise large sums of money
and enables investors to trade shares in the company easily. To achieve a
listing, a company must comply with strict regulatory requirements designed to
protect investors. Only relatively large companies will seek an official
listing. See also Alternative Investment
Market. |
| Offset |
The
extinguishing of a futures/option
position by
undertaking an opposite transaction. A sale offsets a
long position,
a purchase offsets a short position. Sometimes known as a
closing trade. |
| Offshore |
A term used to
indicate a legal regime outside of the United Kingdom. When an investment
centre is offshore it is not subject to UK tax or regulation, including
investment protection rules. For example,
investments
located in offshore centres cannot be the base for a claim on the Investors
Compensation
Scheme in the United Kingdom. Examples of commonly used offshore
centres include the Isle of Man, the Channel Islands and Gibraltar. |
| One Eighth
Measure |
The change in
interest rates required to give a change in price of a
bond of
#1/8. The lower the one eighth measure, the more sensitive the bond
price is to changes in interest rates. |
| Open |
Market
positions that have not been
offset, i.e.
still capable of delivery. |
Open
Interest
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The number of
contracts
left open in the market capable of delivery. With
futures, open
interest is counted either by taking all of the
long positions
or all of the short (to take both long and shorts would
lead to double counting as they are different sides of the same contract). With
options, all
long calls and puts or all short calls and puts would be taken. Open interest
gives a useful indicator as to the liquidity in the market. High
open interest
figures suggests greater liquidity, as many who have open positions will wish
to offset them before expiry of the contract. |
| Open
Offer |
An issue of
shares by a company for cash to existing shareholders on a basis pro rata to
existing shareholdings. It is similar to a
Rights Issue. However,
the key difference is that the right to subscribe for shares in an open offer
is not renounceable, i.e. it cannot be sold on
to another investor. In a rights issue, the investor can if he wishes sell the
right to subscribe for the shares to another investor. |
| Open
Outcry |
A trading
system in which members trade openly and verbally on a trading floor by
‘crying’ out their prices in a designated area normally known as a
pit. Open outcry
is the predominant method of trading used on
derivatives
exchanges, although such exchanges sometimes also use screen based trading
systems. |
| Open
Repo |
A type of
repo in which the
term (length) of the repo is not specified at the outset. An open repo
agreement can be terminated at any time by either party giving
notice. |
| Open-Ended
Investment Companies (OEICs) |
A form of
Collective Investment
Scheme which is designed to incorporate favourable aspects of both
Investment
Trusts and Unit
Trusts. It is legally speaking a company which issues shares, like an
investment trust. However, whereas an investor in an investment trust who
wishes to realise their investment has to sell their shares in the
secondary
market, investors in an OEIC can sell the shares back to the company, as if it
were a unit trust. |
Opening
Order
back to top |
An order type
which requires that the order be filled during the official opening period in
the market at the prevailing market price, not necessarily the opening
price. |
| Opening
Purchase |
A purchase
transaction where rights or obligations are established. With an
option
purchase, the buyer becomes the holder of it. |
| Opening
Sale |
A sale
transaction where rights or obligations are established. With an
option sale,
the seller becomes the writer of the option. |
| Optimisation |
See Passive
Fund Management. |
| Option |
A contract
which gives the holder the right to buy or sell a specified asset at an agreed
price on or before an agreed date in the future. The right to buy an asset is
referred to as a call
option. The right to sell is referred to as a
put
option. |
| Order Driven
System |
A trading
system where anyone wishing to buy or sell stock must take their order to the
market and state at which price they are prepared to buy or sell the stock in
question. Other market participants can then take the other side of the deal,
creating a Matched
Bargain. |
| Ordinarily
Resident Outside UK |
A person who
for tax purposes is deemed not to live in the UK. The regulatory significance
of such persons is that agreement letters and
risk warnings
do not need to be signed by such people if the firm believes, on reasonable
grounds, that they do not wish to consent in writing. |
| Ordinary
Business Investor |
A type of
non-private customer and thus granted an intermediate level of protection under
the rules. Other types of non-private customer are
experts and trade
customers. |
Ordinary
Resolution
back to top |
A
shareholders’ resolution to be voted on at the
Annual General
Meeting or Extraordinary General Meeting of a
company, where a majority of votes cast at the meeting is needed for the
resolution to be passed. Most resolutions are ordinary resolutions. See also
Special Resolution
. |
| Ordinary
Share |
See
Equity
Share. |
| Out
Trade |
A transaction
in which the buyer and seller disagree over the exact details of the trade,
i.e. it does not match. Such disagreements may be over the
number of contracts traded, or the price of the
trade itself. Out trades should usually be resolved by the end of the business
day on which they were traded. |
| Out-of-the-Money |
A
call option or
warrant where the
exercise price exceeds the asset price is out-of-the-money. For example, a call
option on a share with an exercise price of 100p when the share
price is 90p is out-of-the-money. A put option is out-of-the-money when the
asset price exceeds the exercise price. For example, a put option on a share
with an exercise price of 100p when the share price is 110p is
out-of-the-money. See also In-The-Money and
At-The-Money. |
| Over-the-Counter
(OTC) |
Not traded on
an exchange. The benefit of this is that the
contract can
be tailored to meet the investor’s own particular requirements. In
contrast, exchange traded products are standardised but offer greater
liquidity. A major OTC market is the foreign exchange market, where banks trade
directly with each other rather than through an exchange. |
| Overseas
Person |
A non-UK
investment
business. |
| Overseas Tax
Relief |
Where an
individual has an overseas source of income liable to UK tax on which he has
already suffered overseas tax, he may be able to claim overseas tax relief,
reducing the amount of UK tax which is due on the income. The purpose of this
is to prevent individuals suffering unfairly high rates of taxation on their
income, when both UK and overseas tax is taken into account. |
